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Thread: Articles From Chetan Bhagat (Regularly Updated)

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    SB Champion Lieutenant Sidon21's Avatar
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    Unhappy The business of teaching By Chetan Bhagat

    Last week, the director of IIIT-Delhi wrote in these columns about the need to reform the admission process for engineering and other courses. This week, Narayana Murthy made a high-handed comment about the falling qua-lity of IITians. While people seem obsessed about the IITs, other aspects of our higher education system deserve far more attention.
    Barring a tiny percentage of elite colleges, higher education is of questionable quality. Ask corporates and they will talk about a serious shortage of talent. Ask students and they will say there are no good jobs. Clearly, students are not being trained properly to meet the demands of the globalised world.
    Almost everyone agrees something needs to be done about the education system. Strangely, little is done about it. Money spent on education is never questioned, it isn’t really a politically divisive issue and fixing it is a matter of a few right policies and reforms unlike far more complicated problems like corruption.
    We have good, reputed colleges that, at best, accommodate 10% of the applicant pool of students. What happens to the rest? Obsessed with starting salaries and IIT-IIMs and DU cut-offs, we ignore that millions don’t make it. Where do these students go? Do they have a shot at a good life?
    Many of these students end up in private colleges. These private colleges have played the role of providing students with a chance to earn a degree of their choice. There is nothing wrong in this. It fact, it is even good that the private sector is playing a role in educating our students. But the quality of these institutions is an issue.
    Thousands have opened up in the last decade. In NCR alone, there are over a hundred MBA colleges now. With such proliferation, quality standards vary widely across these institutes. While there is demand for them given our large student pool, what they are teaching and what students are learning is another matter. To ensure quality, the government has put in place procedures like elaborate approval processes and regular inspections. However, these are abused and corruption is rife. Many private college owners have personally admitted to me that they had to pay bribes at every stage of opening the college – from getting land and building approvals, to approving the course plan and to set fee structures. Corruption in the private education sector is such a norm that nobody in the know even raises an eyebrow anymore.
    One big reason for corruption is the government’s no-profits-allowed policy for private institutes. Every educational institution has to be incorporated as a non-profit trust. Technically, you cannot make money from the college. The government somehow believes there will be enough people who will spend thousands of crores setting up good colleges for the millions who need seats every year, just out of the goodness of their hearts. On this flawed, stupid assumption that people are dying to run colleges without ever making money rests the higher education of our country.
    Of course, none of this no-profit business ever happens. What happens is that shady methods are devised to take money out from the trust. Black money, fake payments to contractors and over-inflating expenses are just a few ingenious methods to ensure promoters get a return on their investment. This ensures that none of the legitimate players ever enter the field. Ex-academics, world-class corporates and honest people will never touch private education, for they do not want to pay bribes at every stage and devise shady methods to bypass no-profit rules. Thus, people like local country liquor barons, sari manufacturers and mithai shop owners open technical colleges for engineering and medicine. And we hand over our kids and their future to them.
    You don’t need to be an expert to realise that what is happening is seriously wrong. However, policymakers are doing little about it. Perhaps, much like the bootlegging industry, so many regulators and inspectors are making money that nobody wants to fix it. However, corruption in the education sector is not to be taken lightly. When you have corruption in infrastructure, you have pot-holed roads. When you have corruption in education, you have pot-holed minds. We are destroying an entire generation by not giving it access to the world-class education it deserves.
    I have nothing against commercialisation of education. Commerce and business are a good thing. However, when it comes to education, it needs a sense of ethics and quality. Good people must be incentivised to open colleges. Say, by a simple policy fix like allowing private institutes to make a profit. This would mean companies like Infosys and Reliance might open colleges, perhaps on a large scale, as shareholders will approve the huge investment required. If these companies open colleges, at least they will be of a certain standard. Competition can ensure that the ability to make profits never turns into greed. But if the business model is sustainable, many good players would be attracted to this sector.
    This can be done. This needs to be done. Indians care about education. We can have one of the best education systems in the world. It is a matter of collective will and a few good leaders who will make this happen. It should not require a fast or dharna or yatra or anti-politician slogans. When something is sensible, it should just be done. For, that is what educated people do. And we would like to call ourselves educated, won’t we?

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    ..Yaar Patialavi.. Lieutenant-Colonel a_decent_1's Avatar
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    Education, Around a Decade ago was a Service.
    It is now a Business - A booming one at that.

    Why.? Because if you're in the Business of Education you need not pay any Tax from it's income. More and More Businessmen are building Schools and Colleges, Why..? To convert Black Money into White Money.

    Quality Education..?
    The Punjab Technical University churns our Lakhs of MBAs each year. When the Demand in Punjab for an MBA is in Early Thousands. What happens..? MBAs are working as "Sales men" .. !! Something they could have done after passing their +2 .. !!

    I don't know what's the Future of the Education system in India. For me, Quality-wise, it is Bleak.. !!

    Regards.
    AS WE GROW OLDER TOGETHER, AS WE CONTINUE TO CHANGE WITH AGE, THERE IS ONE THING THAT WILL NEVER CHANGE
    I WILL ALWAYS KEEP FALLING IN LOVE WITH YOU.

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    SB Champion Lieutenant Sidon21's Avatar
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    Thumbs up

    Education has boomed as a business, that's true and I don't have any problem with it. Teachers as well as the owners of schools and colleges have the full right to earn their share otherwise no one will try to land in this line.
    However, this much sanity should be maintained in these people that they provide aids of scholarship and fee wavers for the financially poor sections and they do not compromise with the quality of education.

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    Hum Banarasi.......... Colonel Ankhi_sena_mun's Avatar
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    Sanity is rarely preserved when something is privitaised and is a commodity in the open market..... then people only see money and not the quality...... they make it a status not a education.....
    mods decision: any insult to female members will be ignored as the person doing this is somebody known to the mods
    I PROTEST

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    SB Wizard Captain himansh's Avatar
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    Quote Originally Posted by a_decent_1 View Post
    Education, Around a Decade ago was a Service.
    It is now a Business - A booming one at that.

    Why.? Because if you're in the Business of Education you need not pay any Tax from it's income. More and More Businessmen are building Schools and Colleges, Why..? To convert Black Money into White Money.

    Quality Education..?
    The Punjab Technical University churns our Lakhs of MBAs each year. When the Demand in Punjab for an MBA is in Early Thousands. What happens..? MBAs are working as "Sales men" .. !! Something they could have done after passing their +2 .. !!

    I don't know what's the Future of the Education system in India. For me, Quality-wise, it is Bleak.. !!

    Regards.
    totally agreed even my friends are hiring mba's for marketing their business at just 11000/m

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    SB Wizard Captain himansh's Avatar
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    Unhappy

    and new dentists in NCR are struggling to get even 5000/m
    evan a labor earns more than this

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    interesting share
    Live amongst people in such a manner that if you die they weep over you and if you are alive they crave for your company.

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    Chetan Bhagat's new book Revolution 2020 is all about current education system. He very well narrated, how an undergraduate opened university with the help of our Corrupt System.
    Today Education is business. When I look around my city, few years ago, there were schools run by some Old trusts, Govt. Schools and couple of English medium schools run by Missionaries. Within last decade, businessmen, Political Leaders have opened Schools.
    Formula is same - Build Posh Buildings, Hire some reputed Teachers/Professors as Principal. Hire some Christian teachers (because they are supposed to good in English, hence good teachers) hire some local teachers from other schools providing extra money. Then full fledged marketing. Then count money, money and money..............
    Last edited by Roger69; 27-10-2011 at 08:22 PM.
    ............retired.

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    SB Champion Lieutenant Sidon21's Avatar
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    Thumbs up Being Rich Being Good-By Chetan Bhagat


    Recently, Rajat Gupta, ex-CEO of McKinsey and one of the most high-profile corporate figures in America, was arrested on insider trading charges. He is accused of having tipped off Raj Rajaratnam, who once ran a hedge fund worth $7 billion. Rajaratnam, who at his peak had a net worth of $1.8 billion, is already sentenced to 11 years in prison. Thirteen others have been sentenced too. This would seem surprising to many who see America as a nation associated with relentless greed, materialism and consumerism.When we were growing up, we were often told that ‘western values’ are extremely harmful for society. We Indians were supposed to be more humane, loving, caring, spiritual and genuine. The West was an embodiment of all things wrong – from excess consumption to decline in family values. We were the good ones (or is it G1 these days?).Yet, it is America that comes down hard on people who break other people’s trust. Punishment for taking more than your fair share – whether through insider trading or corruption – is severe. In Gupta’s case, he may not even have benefited directly – he may have merely tipped off his friend as alleged, unaware how that tip would be used. If proven, that is reason enough for the American system to punish him.Yes, America is materialistic. It is even greedy to a certain extent. However, Americans have created a system in which wealth is created with hard work, innovation, talent and enterprise. People who display these qualities move up. Every generation in Ame-rica has thrown up several innovators and billion-dollar global corporations, made without government connections. Americans may have a hundred flaws, but they are extremely protective of their system. Anyone who tries to break it to come up in life using unfair means is punished severely. Schools and colleges have a strict honour code against cheating. And no matter how high-profile the person, society doesn’t flinch in teaching the wrongdoer a lesson.We, on the other hand, don`t even have good laws to prosecute the blatantly corrupt, forget insider trading. Many may not even see insider trading as wrong – we see it as a privilege of being in a position of status or power. Any Dalal Street veteran will tell you, despite regulator SEBI’s commendable efforts, insider trading is rampant among the high and mighty. It is not limited to the stock market. The real estate developer who finds out the zoning master plan of the government beforehand, and pre-emptively buys real estate, is also doing insider trading. However, such people are never punished.In fact, our government attacks almost every anti-corruption crusader. It is as if the current government has taken a mandate to protect the corrupt. The prime minister, under whom the biggest scams took place, remains in power using every excuse – from ‘he did not benefit’ to ‘he did not know anything’. In almost any other civilised country, heads would have rolled. Sadly, even our opposition parties have lots of corrupt people. Hence today, even if we want, we can’t vote in an honest government.What happened? Weren`t we supposed to be the good ones? And yet, it is the greedy, western `baddies` who seem to be doing a better job at being just, truthful and equal. They are not only richer; they seem better too. It is disheartening to face this ugly truth. After all, the poor person is supposed to be the better person – at least that`s what they show in the movies.Well, we don’t have good leaders because in the past we haven’t cared. We’ve only wanted leaders from our caste or religion. We have been enamoured less by honesty, more by dynasty. We do not have a merit-based system that generates wealth, nor anything in place to protect it. They do. Hence they are richer and, in many cases, better than us. The system we have, in which there are a few kings and lots of common people, cannot generate wealth. It kills innovation and keeps the powerful as rent-seeking controllers of resources. It will eventually turn us into a nation of clerks for the world. Innovators will rule the world; we will be left to serve them. We may not get colonised poli-tically, but will economically.Can we change this? Of course we can. Society does change, even if slowly. There was a time we used to practise ‘sati’. We realised it was wrong and now we don’t. To change, first let us accept our shortcomings. We Indians lack some essential, good values. Being part of corrupt society has made us all somewhat corrupt. From copying assignments to faking our children’s ages in railway tickets – we have all done wrong or accepted wrong as part of life. We need to define a set of new values and propagate them in our social circles.

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    SB Champion Lieutenant Sidon21's Avatar
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    Lightbulb Don’t let them divide and rule any more- by Chetan Bhagat MUST READ

    Sometimes i wonder what it would be like to be a member of an oppressed Indian minority. I am neither a Muslim nor a dalit. I am not a woman. I don’t even belong to the northeast; people from there are often discriminated against in various parts of India. The closest i felt like a minority was when i worked in a bank abroad, and felt the occasional tinge of discrimination against Indians. Still, that was minor.In a sense, i can never fully understand the feelings a minority person goes through. Hence, any attempt to give advice to the minorities of India is audacious. None of us majority members are completely qualified to comment on your situation.However, a better India would require better leaders, something we have to work together for. We have to learn to vote better. We haven’t been doing so, and that is why we often find some of the most dishonest people in society right at the top. Perhaps we have a bad system, or we don’t know how to vote. Most likely, the candidates managed to fool us.One way some politicians fool us is by playing vote-bank politics. They understand the emotion of oppression felt by the minority, claim to be their saviors and ask for their vote in return. The minority votes for the candidate or party in the hope that they will come to power and protect them. Unfortunately, that doesn’t happen. What happens is that the wrong guy is chosen for the job, someone who is neither competent nor honest. He is chosen because he is a symbol of hope for the minority.However, decades pass and the minority remains as oppressed as ever. Of all the minorities lured into such deceptive vote-bank schemes, our Muslim citizens are wooed the most because their community is one of the largest in terms of actual numbers. They are often believed to vote en-bloc. Also, as a community, they face significant oppression. Appeal to that injustice, and one can bring them all together, and hopefully, get a nice block vote for a politician.However, my dear Muslim brothers and sisters, you have been had. Yes, you have been fooled time and again by these politicians who promised you the world, but kept you as oppressed as ever. They may have given you an odd freebie, but they kept the whole nation poor due to bad governance. They never built proper infrastructure, irrigation facilities, enough schools, colleges or healthcare to make sure citizens enjoy a respectable life. And yes, they have fooled the whole nation. They kept us busy with the Hindu vs Muslim debate, while they hid the fact that the entire country suffered due to their misgovernance. For when an Indian student doesn’t get a good college after school, it doesn’t matter if he is Muslim or Hindu, it still hurts the same. When government hospitals treat Indians worse than animals, the religion of the patient doesn’t matter. When 90% of Indians cannot afford fresh fruit because of inflation, it isn’t the Hindus or Muslims who feel the pinch. We all do, and it is time to we ask our leaders to fix the problems rather than create new, artificial ones.I want to urge the Muslims of India to keep the heat on politicians. Do not commit your vote or loyalty to any political party forever. Time has shown, they will only take you for granted. One should keep their vote floating, and in the end vote for the better (or less worse) party. Your vote has much more power if it can change over time.The above, however, still doesn’t take away the fact that minorities face oppression. Laws should be in place to prevent discrimination, and culturally, Indians will have to become open-minded if they have any dream of seeing their country as a developed nation. We as majority members have to be extra cautious to not hurt feelings of minorities. Of course, there have been situations where even the majority community has suffered because they were a local minority – Kashmiri Pandits, for instance. In such cases, the Muslim community should be sensitive to the feelings of Hindus too.We are at a unique point in India’s history. A significant part of the population is craving for change. Vote-bank politics and hating each other’s religion should be chastised and branded un-Indian. After all, our religions have stood the test of time and are great. It is our nation, yours and mine, that has to be made great now. Are you on board?

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    SB Champion Lieutenant Sidon21's Avatar
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    Default Articles From Chetan Bhagat (Regularly Updated)



    Chetan Bhagat, the underage optimistic prodigy has turned us rebel again and again with his writings and continues to stir us up with his perfectly written articles. This thread is to share some of those very well written articles to our friends of SBF.I know you guys hate reading long articles without pictures but believe me, it's worth a try. Hope you like it.
    Last edited by Sidon21; 22-12-2011 at 07:15 PM.

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    Default Save Us From The Lerds!

    There is a common, slightly pejorative term used to describe certain people with a scientific ortechnical background -nerd . Nerds are defined as people slavishly devoted to academic pursuits. They are supposed to be intelligent but socially awkward , lost in equations and formulae, and disconnected from the real world. Not every person with atechnical background is socially inept. However, I being from the species,humbly accept there are enough nerds in this world to create the stereotype. Many of us find it easier to solve differential calculus than say, speak to strangers at a party. I have been tagged as a nerd at various stages of my life, especially while being turned down by women (as in ‘i’d prefer being a nun to being seen with a nerd like you’ , or ‘go solve your physics problems nerd, the Stephanian already asked me out’ ).I accept it. Sometimes it is difficult for nerds to articulate or absorb what is really happening in the real world. Nerds like to solve problems, and get quite uncomfortable if they cannot answer in a certain number of steps. Hence, it is relatively easy for a nerd to figure out how a rocket is launched into space, which though complex, has a set solvable path. It is much harder for nerds to approach questions like, ‘how to get this girl to like me’ , or more seriously, issues like ‘how to solve corruption’ or ‘why is the Indian economy and politics in such a mess?’I accept it – we in our rigorous yet narrowminded scientific education, find it difficult to approach subjective issues. That is why we are called nerds.However, after accepting the flaws of my own species, allow me to point a tiny finger at our humanities stream brethren. Allow me, ladies and gentlemen, to introduce a new, nerd-equivalent category for our ‘liberal arts’ background people -the lerds.The lerds are our so-called ‘liberal arts’ , or in India simply the ‘arts’ students who are supposed to be open-minded , visionary and articulate about social issues. Some of these people, with their background in wonderful liberal arts subjects, are our intellectuals. They sit on thinktank committees and participate in debates to solve issues facing our country. Lerds give 45-minute speeches in conferences held at posh Delhi venues on topics ranging from the environment , corruption to poverty eradication, FDI, girl child, healthcare and infrastructure. Lerds can be spotted in TV debates on English news channels (but never on entertainment or vernacular channels). Female lerds often prefer an ethnic yet classy look.Unlike nerds who shiver at the thought of public speaking, lerds can speak on any issue. When they do, they sound intelligent even though their point is often not clear. Warm, fuzzy feelings run through their listeners as they see the lerds’ grasp of issues like the primacy of Parliament and their use of wonderful terms like ‘need of the hour’ (notice the urgency. Not need of the week, month or year – need of the hour!) .Lerds know it all. They understand nuance like a nerd never would. However, unlike nerds who love solutions, lerds have one defining, important trait. Despite all their intelligence, grasp and knowledge, lerds hate solutions. For solutions mean there is a direction set to solve the problem, and then there is not much debate left. And where is the fun in that? So if a Lokpal bill is proposed as a starting step to solve corruption, lerds will hate it.Because according to them ‘the need of the hour’ is to remove corruption. However , how exactly that will be done is not the lerds’ concern. So if for inflation, solutions like reduction in government subsidies and productivity improvement infrastructure projects are proposed , they will shoot it down with a ‘it is not that simple’ or a ‘India is not that easy to figure out’ . For you see, all that lerds are interested in is to figure out the problem (and show the world how smart they are in figuring it out). Proposing or backing a solution is for plebians and nerds. Lerds are above all this.Where do lerds come from? Well, they are often a result of the flawed Indian education system , which focuses on knowledge more than application . Even in science subjects, but particularly in the arts, Indian students can score good marks by rote knowledge, rather than being forced to apply themselves. Teaching materials and methods in humanities are archaic and outdated . Many post-graduates in wonderful subjects like sociology, philosophy, psychology and economics have excellent knowledge, but find it difficult to apply their knowledge to the Indian context, and impossible to give a specific solution.Of course, not every liberal arts student is a lerd (just as every tech student is not a nerd). However , it is time we accept that intelligent yet inept people exist on both sides- the sciences and the arts. Knowledge is only one part of education; the other, equally important aspect is application. Nerds need to integrate their problem solving abilities to the real world. Lerds need to learn how to solve problems rather than just pontificate. The arts and science streams are just man-made divisions. To make progress, we Indians need to learn and apply from both disciplines. I hereby propose a truce between the nerds and the lerds, who should come together and learn from each other. After all, isn’t that the need of the hour?
    Last edited by Sidon21; 22-12-2011 at 07:11 PM.

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    Default Shopping for Consensus

    The recent retail FDI mayhem in Parliament reminds me of a childhood school memory. Once, in class VII, our strict teacher had given us a challenging assignment as homework. On the due date, most of the class had not done it. However, just prior to the teacher’s arrival, someone had a brainwave. He planted a Diwali bomb on a long fuse under a vacant desk. The teacher arrived. Within a minute a deafening noise interrupted class.Shocked, the teacher rushed out and brought back the head-mistress. The rest of the teacher’s period, both of them tried to figure out who set off the bomb and gave us lectures on our rowdy behaviour. The culprits were never found. The period ended in an hour. We breathed a sigh of relief. Nobody had cared about the homework.The change in retail FDI norms is a similar Diwali bomb exploded by our wonderful government, right in the middle of the winter session, to take attention away from their actual homework – important matters such as the Lokpal Bill, the black money investigations and addressing inflation. The noise and smoke from the retail FDI bomb has galvanised all the MPs who are trying to portray themselves as the saviours of Indian jobs. Often, these MPs have little idea of what is being talked about here, the actual amount of threat versus the opportunity. Playing on the xenophobia that plagues Indians already scared about financial security, all they have to do is scream, “Bad foreigners. Good Indians,” and they find their supporters.In this cacophony, it is pointless to argue the merits and demerits of the policy change. It is too late. The issue has become emotional. Reason will not work anymore.But reason suggests we cannot afford to turn up our noses at FDI. The aspirations of India’s massive population cannot be met by the capital generated internally. We have opened many sectors to FDI. In every such sector, service quality has improved and domestic industry has survived. Yes, the FDI investor makes a return, but not as a handout. The investor does the work and takes the risk (for instance, in dollar terms, foreigners have lost 45% in the last year on the sensex).Our banks have thrived even after foreign banks came into the country. Telecom, insurance, software – there are innumerable examples of FDI working well in India. Where it hasn’t worked well, it is usually because we made onerous regulations that never actually opened the sector for business.Even in FDI retail, a more sensitive issue, it is unlikely that it will kill our domestic small-scale retail. Indian mega corporations have already entered the retail sector, but the neighbourhood kirana stores and the streetside vendors still survive quite well. These new Indian chains have provided a superior shopping experience. They have also created jobs and treat their employees better than the kirana storeowners, who have no employee welfare policies to speak of. The Philippines, Thailand, Malaysia and China – all have allowed foreign retail stores and there has been no significant impact on jobs.Hence, this is one of those rare occasions in recent times where one could actually agree with the UPA government. However, the move may have been well-intentioned, but the way UPA has handled it has been a bit of a disaster.If this was planned like the bomb in class, as a shrewd political move to distract, it has backfired. If this was done without thinking, it makes it worse. For it exposes the Congress’s inability and unwillingness to build consensus on almost anything. Forget opposition parties and allies, evenCongress members did not like the way the policy was thrust on them. The power of the family brand keeps dissent under wraps but some chinks are evident.After all, it must be suffocating to be in the Congress for some capable leaders who are completely ignored simply because they are not as close to the family. This internal simmering within the Congress is a bigger threat to it than the opposition.The FDI retail drama exposed a recurring BJP problem as well; its inability to manage outrageous statements. One of their saffron-type leaders wanted to burn Walmart stores down. Great going, madam. Our software programmers work in the US in the tens of thousands. Our call centres have taken many US jobs. Should they burn us down too? The BJP has many good orators but no restraint.FDI retail is a free-for-all right now. However, if and when some sense prevails, three suggestions may deserve some thought. One, do your homework first – the Lokpal Bill and many other Bills are stuck. Clear them. Walmart can wait a few weeks. A corruption-free India is more important than a supersaver offer on T-shirts. Two, Parliament should adopt a resolution, that the hours lost due to adjournment have to be covered up within a session – through overtime, working weekends or extending the session dates. Three, the government, with humility, should involve everyone in Parliament to get a general policy consensus on FDI, not just for retail, but all sectors, across all industries.Coming back to the school story, the next day the teacher came to class and asked for the assignment. Those who hadn’t done it were punished, and extra severely due to the bomb trick played the previous day. Distraction works, but only for a while. Ultimately, the homework has to be done.
    Last edited by Sidon21; 22-12-2011 at 07:14 PM.

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    Thumbs up Altitude Sickness!

    It is perhaps ironic that i am writing this column on board a Delhi–Bangalore Kingfisher flight. A lovely lady has served me a tomatomozzarella sandwich on beautiful white cutlery. Her earnest smile makes it impossible to guess that the airline she works for might be in trouble.
    I don’t know if she realizes that the airline lost over Rs 1,000 crore last year, has never really made money and owes its lenders over Rs 7,000 crore.These are mind-boggling numbers. Surely, this level of debt and losses were not accumulated overnight . How did Kingfisher reach this point, where caterers don’t upload sandwiches and airports won’t let its flights take off until it pays cash?Didn’t the stakeholders involved (lenders, directors, vendors and others) express concern when the losses and the debt were at, say, half the current level? What kept it going? Or for that matter, what’s keeping it going even now?Financial analysts across the world will agree, the airline sector is one of the worst sectors to make money and has the poorest returns. The business requires huge capital investments upfront, competition is intense and customers are price-sensitive. These factors affect the Indian airline sector even more, where interest rates are high, customers extraordinarily price sensitive and the government regulations/taxes cripple you.And yet, there are plenty of entrepreneurs who want to have their own airline. One wonders why?Well, let’s face it, there are few businesses as sexy as owning an airline. You could be making hundreds of crores as a fertilizer manufacturer, a packaging plant owner or garment exporter. Yet, at one level all these businesses are boring. Who cares if you have a 30-acre , money-spinning industrial plant in a remote town? However, if you have a dozen planes (on borrowed money, of course), you are the new man in town. The fine-looking pilots, the charming flight attendants , flight schedules, exhilarating takeoffs – all make the 30,000 feet-in-the-sky business ‘oh so sexy’ . It is almost as glamorous as Bollywood.And due to this sexiness, everyone wants to be a part of it. Public sector banks line up to give an airline thousands of crores. This, for a mere couple of points more interest than if they had invested in risk-free , but oh-so-dull RBI bonds. Netas (even our super-elusive PM felt the need to make a comment about helping Kingfisher!) and babus love to get involved in airlines. Incidentally, that is the main reason why another money-burner , Air India is still alive.The airline industry is seen as a glamour industry, when in reality it is anything but that. It is a dull, horrible , never-ending quest to cut costs, meet demanding schedules and keep the planes busy. It is not much different from a logistics, courier or other transportation company. Most of the profitable airlines in the world are cost-cutters . Some have scraped off paint from the planes to reduce the weight. Others have shaved inches of legroom to add an extra row.The winners have the lowest cost, are thus able to offer the lowest prices, which fill the maximum number of seats. Indigo does this in India, and is still profitable, despite the draconian tax structures (which definitely need revision). A few luxury airlines do exist, but they serve extraordinarily affluent markets with a high number of senior business travellers. They also serve cities that are global business hubs (SIA in Singapore , Cathay Pacific in Hong Kong and Emirates in Dubai).Even these airlines run a very efficient economy class. Kingfisher’s business model, in hindsight, was flawed from the start. A focus on flamboyance and opulence in a super price-sensitive industry was extremely unlikely to work. And it never did in financial terms. Banks could have spotted this years ago and pulled the plug on it, leading to a far more manageable situation. However , who cares about a few thousand crores of depositors money when the party is so much fun?Kingfisher management’s claim that the government tax structure led to the decline is only partially correct. The tax structure for airlines does need reform. However, all airlines have the same onerous taxes. Kingfisher’s fundamental business model has a problem too, and all stakeholders involved need to face up to it.
    Despite what the people involved and the government say, it is not easy to fix Kingfisher. The debt levels and current losses are too high to engineer a quick turnaround. Someone has to take the pain, and most likely it will be the banks that were stupid enough to lend so much money in the first place (and might just lend some more).
    Some of these banks are public sector banks –so , indirectly, the Indian people will pay for the extravagance and the bad business judgments of a few people.Meanwhile, the flight attendant comes with dessert, and i cannot resist asking if she knows about the airline’s problems. She says she doesn’t know much, but her salary has been delayed and some people are scaring her about the airline’s future . I ask what she thinks will happen; she says, “This is just like turbulence. Sit tight with your seatbelts, and it will pass.”For the sake of all hardworking people at Kingfisher who did not cause this, i hope it does.

  15. #15
    teekhi jammu chilli Major General arumita's Avatar
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    nice thread worth reading














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